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Do you want to retire early running a very simple and straightforward strategy for creating reliable income on Nvidia stock? Well, look no further than the wheel strategy. In this video, I'm going to talk about the wheel strategy and we're going to go over step by step how to use the wheel strategy on Nvidia stock to create safe passive income in your retirement.
So, if you really want to retire early with options, this is the simplest, easiest, and safest strategy that you can use. So my lifestyle is entirely funded by option trading and I've been using really simple strategies and I don't believe in like complicated ones. I keep it really simple and the wheel strategy is the best and Nvidia which I'm also going to talk about the stock itself is also the best because it has high implied volatility.
Now I'll give you a little bit of a preview right now. Nvidia stock is currently trading at $17 per share. And if I simply go to trade options on Nvidia I'm going to show you the first step of the wheel strategy which is essentially selling put options. So, if I go to sell put option right now and I pick an expiration date for, let's just say we're going to go, you know, May 30th or early June, something like that.
If I just show you an option right now, and I'll explain to you a little bit later in this video, but if I show you the implied volatility here, 58, that's really high. So, Nvidia is a really good growth stock and it has good implied volatility, has lots of volume, and the bid ass spread is also really good on Nvidia.
So, essentially, this is a company that is really easy to run the wheel strategy. Yeah, I'm not really like a materialistic guy or anything like that. But what I do like about option trading is because it allows me to have freedom. So I can go to Sweden in one week or I can go to Dubai. I can go to say Thailand.
I was there one time. Or I can just simply, you know, travel within Eastern Europe. And yeah, it gives you a lot of freedom and flexibility. And I just think that running the wheel strategy because it's consistent income, it gives you the opportunity to not really have to be tied down to a job. Especially if you have income like three to six months in a row that's like say $10,000 a month, you could be like, "Hey, you know, I'm good." Like 6 months in a row, I'm $10,000 a month.
I'm confident that I can retire. And yeah, whatever that looks like for you. And the wheel strategy is my favorite strategy of all time. And as I've said multiple times on my channel, the reason I kind of like it is this strategy is like the Swiss Army knife when it comes to option trading. It's very consistent, reliable, and to many different market environments.
In fact, it works for bull markets, bare markets, and neutral markets. But I will tell you right now up front that in a bull market, it's better just to buy stocks and buy call options. But it'll still perform well in a bull market as well. So yeah, this option trading strategy, which focuses on selling options.
So you're selling puts, selling calls, it literally only takes one to two hours a week. Let's talk about why Nvidia Nvidia's business is simply a giant that cannot be stopped. chips, AI, gaming, and autonomous driving. These are all impacts that Nvidia has with their chips, and they're not going anywhere anytime soon.
They have a huge market share. Despite some of the turmoil from tariffs, Nvidia still has and will continue to have a dominant position in AI manufacturing. AI still, by the way, in early stages. If you look at like Chad GPT, the LLM model is still improving a lot. Nvidia is powering a lot of the AI industry.
It's the infrastructure of the AI industry. Nvidia is also fundamentally very strong which not a lot of people pay attention to. If you look at some of their metrics like the market cap 2.3 trillion, this company has a road map for like $5 trillion in the next 5 to 10 years. You look at their PE ratio, it's really relatively cheap for a very high growth company.
Huge revenue growth. So they've multiplied their revenue many, many times. Yeah. And just looking at net income explosion, like you can see on the screen, just massive year-over-year increases, like absolutely massive. So I also want to show you some analyst opinions, some strong buy ratings. Even the lowest price target is actually above the current price.
So you can take a look right here. So analyst recommendations, many analysts have it as a strong buy, but a majority just have it as a regular just buy here on Yahoo Finance. And the average price target is 163. So there is a lot of room for upside based on what analysts are saying with a high in the stock of, you know, 220.
So that's the highest most bullish analyst. And even the most bearish analyst when I and I cover this recently on my channel, he thinks it's $100 per share bare minimum and he's the most bearish guy. So, you know, I would say that this stock is clearly probably, you know, either fairly valued or undervalued, definitely not overvalued.
So, this is a really good bargain price compared to expectations here. And, you know, the gap might fill within, you know, a year or two years. So, there's a lot of money to be made here. Now, also, you can look at the revenue. The revenue trend is very, very clear rising as well as the earnings are rising.
And Nvidia just continues to beat earnings year after year. And yeah, it's really easy for the company to just keep exceeding because of the huge demand for AI right now. Yeah. So, this opportunity is huge. Obviously, I'm not a financial adviser or anything like that, but you know, I want to tell you about Nvidia and then I'm going to go into the strategy here because I honestly think this is the only video that you really need to understand how to make consistent income.
Like, it's not that complicated. You don't have to buy courses or Patreons or free webinars or any of that. like I'm just going to tell you everything here for free. So essentially look they have you know some innovation blackwell chip if you take a look at what Jensen Hong has revealed with blackwell ultra it's a family of chips shipping later this year and ver rubin the company's next generation GPUs that are expected to ship in 2026 simply the processing capabilities is like next to none like the exponential growth that they have is just absolutely wild and I'm so excited for the future for these chips to really you know power the AI revolution so blackwell Ultra that's much faster faster than their old ones from 2022.
Their chips continue to just expand. It can help big AI models give answers in 10 seconds instead of like 1.5 minutes. So, it's really like an exponential increase in terms of like computing power. And also, Nvidia is selling a fancy desktop computer with this new chip inside. So, it comes with a ton of memory and super fast internet connection built in.
I just like how Nvidia is just finding really multiple streams of revenue. And like if you look at the big computer brands like Asus and Dell and HP, they will start selling versions of all these powerful chips, they're all going to continue to be used with with all the laptops, all the desktops, autonomous driving, and just so many more applications.
It's it's just wild. So pretty much every company building AI like chatbots, image generators, and research tools, they're going to need powerful chips to stay competitive. It is a must. Like you cannot compete without big data nowadays. That's why Palunteer is such a strong company. And you also just can't compete without AI.
Like if you're not using AI, then you're just left behind. So yeah, another reason that the wheel strategy is so safe on Nvidia is because essentially the company has a really strong support and really good demand and that's why everyone is trading options on them. And that's great news for Nvidia business because the more AI grows, you know, basically the more Nvidia sells.
I really want to go step by step right now and show you an example and then we'll continue on. So look, I want to go to sell put option and again I think May 30th is the best. The 110 strike right here has a 29 delta. I typically go for 30 delta. 30 delta is the sweet spot. It gives you good income and it's a good mix of risk and return.
So if you sell like 50 delta options, those are just too high of a delta and you will get assigned. And in the wheel strategy, you don't mind getting assigned. But if you can collect income over and over like week after week or month after month or whatever time period that you're going to use, I prefer like 2 to 4 weeks, 2 to 6 weeks or so, then it's good, right?
Like you can collect income many times over. And this 110 sell put right here is essentially going for $325. So as soon as you open up this sell put position, then you make $300 on 10 grand, which is like a 3% return in 3 weeks. And this is like an optimal entry. Selling put options creates income and yeah, you're just successfully running the wheel strategy by selling out of the money options.
And you can see here the volume is like freaking wild. 8,000 volume. It's wild. So yeah, that's like the first step of the equation, selling puts. By the way, combining the wheel strategy with one of the strongest companies in the market is also just super genius. It turns into a cash printer that can easily replace your current income.
And if you know what you're doing, of course, then you can also properly pick the right strike price like I just showed you and just keep collecting income many times over before even getting assigned. And this wheel strategy, by the way, thrives on high quality companies with strong fundamentals that have a bit higher volatility.
Like again, that's why Nvidia is so powerful here. So, here's how it works. Like, you know, obviously there's calls and puts. Um, and we're going to be focusing right now. The first step is the selling put options, right? So step number one of the wheel strategy is you sell a put option. So the seller just wants it to stay above a certain price.
But here's the caveat with the wheel strategy. You actually don't care. You don't care at all. Like it doesn't matter if it stays above the strike price. You got premium and that's cool. If it goes below, you still got the premium, but now you're going to be assigned. And that's okay because you basically jump from this category right here as a put option seller and then you you go over here and you become the call option seller because when you get assigned now you have shares, right?
You have 100 shares per contract that you sell. Now that you have shares, you can become a call option seller. So you can go ahead and start selling call options and generating further income. So the seller just wants it to stay below the certain price, right? But you actually don't care. The reason why it doesn't matter is because in this example, right, if you have sold put options, then you're collecting income.
You don't mind getting a sign because if you get a sign, you can sell call options. Now, when you're selling call options, you also don't mind because you're collecting premium. And then if it sells off, well, that's fine because you're going to be selling off your shares at above your cost basis. So, let's say that your cost base is $100.
Well, sell call options above $100. Then you collect premium. So let's break it down a little bit deeper so you have more mastery. All right, mastery is really important. Like you can watch a thousand videos on YouTube or whatever, but I want to help you master this in the shortest amount of time possible.
Step number one, sell a put option. So by selling a put option, you are agreeing to buy the stock specifically 100 shares per contract. Now if it goes below the strike price, then again, you're assigned. All right, so let's go over scenario one that will happen when you sell a put option. So, let's say that we sell a put option here on Nvidia 110.
We're going to continue with this example. So, if the stock stays above your strike price at expiration, you just get to keep the premium. This is awesome because you can literally be, you know, making thousands of dollars and not get assigned. Now, scenario two is if the stock ends up below your strike price at expiration.
Some people may think this is a bad thing is actually your goal in many ways. You don't mind because getting assigned is an amazing thing because now you get to buy the stock at the strike price that you chose and you get to start the next step. Okay. Step number two, you sell covered calls. Now that you have 100 shares, for every 100 shares, you can sell one call option contract.
So yeah, now you can see on the screen right here, like selling a covered call, like you limit your upside, so you can't get more upside, but you know, that's fine because again, you're collecting income and can't make more and you're still making money on the stock. Step number three, like you can rinse and repeat.
So with the capital that you got from selling your shares, if you get assigned on your covered call, you can just rinse and repeat and do this all over again. That's why it's called the wheel because like you sell put and then you go covered call sells off and then you sell put covered call sells off sell put covered call sells off and it's like the wheel shad and that's basically what I've been running for like a very very long time.
So yeah let's let's finish off this example now. So let's say that I get assigned Nvidia at 110 essentially now what I would do is I would sell covered calls on the position. So let's say that I already have Nvidia shares. So then all you would do is just go to sell call and then sell calls above the average cost.
So let's just say let's just say like our average cost is like 120, right? Even though Nvidia is right now at 11774 and let's say that your average cost is 120. Yeah. Like look, you can sell a 125. So look, 125 right here has a 35 delta. You can go even higher. Like I will go for 126. 33 delta. That's about 30 delta which I usually like.
And yeah, you would just sell this. So again, you would get 300 to get in, 300 to get out, and then you also make money on the stock itself. Of course, again, let's talk about the market conditions. The market conditions would have to be pretty good, neutral. So good news is you don't need great market conditions, and during bad market conditions, you're still fine.
So there's actually like a wide range of different market environments that this strategy works in a sideways market. like this is like a perfect strategy because you'll get assigned half like some of the time 30% of the time and yeah once you're assigned you just generate income in a bearish market by the way you manage the strategy is if you get assigned then what you can do is just like wait it out so wait for recovery that's essentially what happened with Nvidia like we made really good money on Nvidia in my community and my coaching calls because what we did was yeah like I was buying some leap options on Nvidia which is like a different strategy but nonetheless like what you have to understand is that good quality companies like recover and Nvidia has not like recovered year to date.
It's still down but you can see here how running the wheel strategy you would acquire Nvidia and then yeah you would do pretty well and I'm just going to estimate you the returns here because it's like we don't know for sure we don't have the back testing software but check it out if you were to be collecting like every single month like you know 3% on Nvidia for selling puts and yeah like so far we're like 5 months in.
So you would make roughly 15% on the premium and despite the market being like bearish, you would be up versus the stock market. So you would be winning. Plus, I'm not even calculating like the amount of money that you make when you already get the stock. Because when you sell a covered call out of the money, say your average cost right here is like, you know, 110 and then you sell like a 120 covered call, you'll obviously get the upside.
So, you know, it's difficult to like give you the exact numbers and it varies because options vary based on volatility and every single day they're changing in price. Like these are the topics that are like more deeper and more difficult that you know I'm happy to coach you on and help you with if you want like even like one coaching call with me.
You can just Yeah, we can have like a Zoom session like just click the first link in the description. Yeah, like this strategy is essentially the golden strategy that you will see like talked about fairly often that I've been talking about for over five years now because it's a system, it's a process and if you use the right stocks like Nvidia, then you can really generate good retirement income and in retirement the most important thing that you really want is you want consistency, right?
So, a lot of like the younger guys, you know, 30s or 40s, like they want like high growth and then when you get in your 50s, like yeah, high growth is still good, but you just really want to get to retirement. And then, yeah, once you're in retirement, maybe you retired early, right? Maybe you're 50 or something.
Yeah, you just want consistency. You want reliability. Nobody really wants to have like crazy volatility in their portfolio. And the best thing about this strategy is it gives you that consistency. Now, there's a few interesting things that I personally do with my one-on-one clients, and we actually further on sell puts even when we do get assigned to get even more exposure into the stock while still running the wheel strategy.
But that's a little bit more complicated than this video. So, yeah, just feel free to send me a message like on Instagram or or I'll drop down my email below if you want one-on-one coaching. So, anyways, yeah, this is the best strategy that you can use. Hope that you enjoyed this video and I'll catch you in the next
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